Correlation Between Cogeco Communications and Apple

Can any of the company-specific risk be diversified away by investing in both Cogeco Communications and Apple at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Cogeco Communications and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cogeco Communications and Apple Inc CDR, you can compare the effects of market volatilities on Cogeco Communications and Apple and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Cogeco Communications with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogeco Communications and Apple.

Diversification Opportunities for Cogeco Communications and Apple

-0.18

Correlation Coefficient

Cogeco Communications  Apple

Good diversification

The 3 months correlation between Cogeco and Apple is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Cogeco Communications and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR and Cogeco Communications is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Cogeco Communications are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc CDR has no effect on the direction of Cogeco Communications i.e., Cogeco Communications and Apple go up and down completely randomly.

Pair Corralation between Cogeco Communications and Apple

Assuming the 90 days trading horizon Cogeco Communications is expected to generate 3.81 times less return on investment than Apple. In addition to that, Cogeco Communications is 1.18 times more volatile than Apple Inc CDR. It trades about 0.03 of its total potential returns per unit of risk. Apple Inc CDR is currently generating about 0.14 per unit of volatility. If you would invest  3,253  in Apple Inc CDR on October 6, 2024 and sell it today you would earn a total of  310.00  from holding Apple Inc CDR or generate 9.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cogeco Communications  vs.  Apple Inc CDR

Cogeco Communications

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cogeco Communications are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Cogeco Communications is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Apple Inc CDR

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Apple may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Cogeco Communications and Apple

The main advantage of trading using opposite Cogeco Communications and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogeco Communications position performs unexpectedly, Apple can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Apple will offset losses from the drop in Apple's long position.

The idea behind Cogeco Communications and Apple Inc CDR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.